CITATION: IBEW Local 636 v. Orillia Power Generation Corp., 2019 ONSC 6442
DIVISIONAL COURT FILE NO.: 449/18
DATE: 2019/11/05
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Sachs, D.L. Corbett and Sutherland JJ.
BETWEEN:
International Brotherhood of Electrical Workers Local 636
Applicant
– and –
Orillia Power Generation Corporation and Arbitrator George Monteith
Craig Flood and Katherine Ferreira, for the Applicant
Mark D. Contini and David L.W. Francis, for the Respondent, Orillia Power Generation Corporation
Respondents
HEARD at Toronto: September 30, 2019
REASONS FOR DECISION
H. Sachs J.
Overview
[1] The Applicant, the International Brotherhood of Electrical Workers, Local 363 (the “Union”), seeks judicial review of an arbitration award by George S. Monteith (the “Arbitrator”) upholding the layoffs by Orillia Power Generation Corporation (the “Employer”) of two unionized employees (the “Grievors”).
[2] The Employer, a subsidiary of Orillia Power Corporation, generates electricity from three hydro-electric facilities. The Union is the bargaining agent for its employees, including electricians and mechanical fitters like the Grievors, Bill O’Brien and Matt Beers. The Union and the Employer are parties to a collective agreement.
[3] The arbitration arose in response to the Employer’s decision to lay off two employees—one in its mechanical and one in its electrical department—in order to eliminate a $78,000 labour cost that could not be allocated to planned capital or maintenance work.
[4] In each of the two departments, the Employer was choosing between two employees to select for layoff. Article 24.1 of the collective agreement, the first under the heading “Lay Offs and Transfers”, provides as follows:
It is understood that in the application of these provisions, ability shall be the governing factor in determining whether an employee is qualified to perform the job available in case of lay-off, rehiring, promotion and demotion. Ability being relatively equal, seniority shall govern.
[5] In its electrical department, the Employer selected Mr. O’Brien for layoff on the grounds that his abilities were relatively equal to those of the other, more senior employee. In its mechanical department, the Employer selected Mr. Beers for layoff on the grounds that the other, much more junior, employee’s abilities exceeded his. The Union pursued individual grievances on behalf of the two Grievors, as well as a policy grievance in respect of the decision to conduct layoffs.
[6] The hearings before the Arbitrator took place over thirteen days between November 30, 2015 and October 7, 2016. The Arbitrator did not provide the parties with a decision until May 15, 2018.
[7] The Applicant advanced a number of arguments on its application. However, the only one it pursued in oral argument is that the Arbitrator’s award was unreasonable because, in unduly giving deference to the Employer on the question of which employees to lay off, the Arbitrator applied the wrong standard of review and failed to answer the question before him.
[8] For the reasons that follow, I would dismiss the application.
Standard of Review
[9] The parties agree that reasonableness is the standard of review to apply to the decision of the Arbitrator.
Analysis
Did the Arbitrator Unreasonably Apply the Wrong Standard of Review?
[10] The Arbitrator began his analysis on this question by discussing Article 24.1:
[96] The parties agree that Article 24.1 is a relative ability clause similar to many promotion and posting clauses. It provides that “ability shall be the governing factor in determining whether an employee is qualified to perform the job available in case of lay-off” and “[A]bility being relatively equal, seniority shall govern.” The provision is a type of competition clause, the purpose of which is the retention of the best or most able employees. The seniority of the employee is not a factor to be taken into account in the assessment of ability. Seniority is only relevant as a tie-breaker where the abilities of competing employees are relatively equal.
[11] The Union takes no issue with this summary of Article 24.1. Where it takes issue is with the Arbitrator’s view of the approach to be followed in assessing the relative abilities of the affected employees and to determine who should be laid off. That approach is outlined in para. 97 of the Arbitrator’s decision where he quotes from a previous decision of his (Nithview Community and Labourer’s International Union of North America, Local 110 (Chicas Grievance), 2015 72647 at para. 25) that found that the
…predomina[nt] arbitral approach to the standard of review of a job posting decision of an employer is to first determine, on a standard of correctness, whether the employer has complied with the requirements of the collective agreement in respect of the process or the factors to be considered and, second, if the employer has considered all the factors set out in the collective agreement, to review the employer’s decision respecting the relative abilities or qualifications of the competing employees on a standard of reasonableness. (Emphasis added).
[12] Following this approach, the Arbitrator considered the arguments and the evidence concerning the Union’s position that the employer mistakenly applied the “ability” factor by equating ability with qualifications. On this point the Arbitrator agreed with the Union that “ability” had to be assessed separately from qualifications, but found, at para. 104, that the Employer did not choose the junior employee for the mechanical position because he had an educational qualification (as a millwright) that the senior employee did not, but rather because the junior employee “brought abilities from his millwright training that the Employer believed were needed in the position at the time of the lay-offs and into the future.” Thus, he found that the Employer correctly applied the ability requirement set out in the collective agreement.
[13] The Arbitrator then turned to the evidence concerning the relative abilities of the employees in question. With respect to the electrical maintenance employees, the Employer determined that the abilities of the competing employees were relatively equal and therefore it retained the most senior of the employees. According to the Arbitrator, the onus was on the Union to demonstrate that Mr. O’Brien’s abilities were demonstrably superior to those of the more senior employee that was retained. On this question the Arbitrator found that the evidence called by both parties demonstrated that the abilities of both employees competing for the electrical maintenance jobs were relatively equal. He then went on to find, at para. 105, that the “contention that O’Brien is superior to Burke is not based upon any evidence that shows a marked difference in the ability to do the work but rather on the opinions of the Union witnesses, …that Burke appears to lack confidence performing the work because of some past incident.” The Employer accepted that Burke lacked confidence, but found that this had not diminished his ability to do the work assigned to him. The Arbitrator found, in the same paragraph, that the concern about Burke’s confidence was
an observation about a personal matter that has little, if any probative value on the question of the relative abilities of O’Brien and Burke to perform the electrical maintenance work required by the Employer. It certainly falls well short of the proof required to establish that O’Brien’s ability is demonstrably superior to Burke’s.
[14] He then turned to the assessment of the relative abilities of the two employees competing for the mechanical maintenance position. On this question the Arbitrator began by finding as follows, at para. 106:
I have no difficulty in concluding on a review of the evidence that the Union has met the threshold of establishing that Beers’ abilities are prima facie, relatively equal to Nelson’s. Indeed the Employer does not dispute Beers’ ability. Accordingly, in such circumstances, the Employer bears the onus of establishing that its decision to retain Nelson [the junior employee] over Beers based upon its assessment of their relative abilities was reasonable and worthy of deference. (Emphasis added).
[15] The Arbitrator went on to consider in detail the evidence that the Employer relied upon in making that assessment. In conducting this exercise the Arbitrator provided reasons why he was rejecting the Union’s attacks on the reliability of key aspects of that evidence (particularly the evidence of the front line supervisor of the employees in question who testified that in his opinion the abilities of the junior employee were superior to that of the Grievor Beers).
[16] The Arbitrator made the following findings respecting this evidence, at paras. 111–112:
There are no issues with Beers’ mechanical abilities. He is very experienced working on hydro-electric machines and equipment over his lengthy career. However, the governing factor is ability, not an employee’s experience at the time of the lay-off. It is apparent that at the time of the lay-off following a period of capital improvements, the Employer was seeking in a maintenance mechanic on a go forward basis more than just technical abilities but the kind of abilities Nelson had demonstrated he possessed, whether as a product of his millwright training, or otherwise, to take the initiative in regards to problem solving in the workplace or in conjunction with outside providers and do more repair work in house and reduce the reliance on outside providers.
It is not the role of an arbitrator to determine whether the Employer made the right decision concerning the relative abilities of Beers and Nelson. Rather, it is to review the decision to determine if the evidence reasonably supports the decision taken by the Employer. It is apparent that, upon review of the evidence, that the differences between the abilities of Beers and Nelson are not minor or insignificant in terms of the mechanical abilities the Employer required in the workplace. As a result, I am unable to conclude that the Employer’s decision to retain Nelson over Beers was unreasonable or so lacking in rationality that no deference ought to be afforded the Employer. (Emphasis added).
[17] According to the Union, the Arbitrator erred when he found that it was not his role to determine if the Employer made the right decision concerning the relative abilities of Beers and Nelson. That was precisely his role and in choosing not to make his own decision on this issue, he failed to answer the question before him, rendering his decision unreasonable. In other words, the Union argues that the Arbitrator erred in giving deference to the Employer’s decision on the layoff question.
[18] In support of its position the Union relies on the decision of the Divisional Court in Canadian Food and Allied Workers Union, Local 175 v. Great Atlantic and Pacific Co. of Canada, [1976] O.J. No. 32 (“Great A and P”). In Great A and P the Divisional Court was reviewing the decision of a board of arbitration that dismissed a grievance brought by an employee who was the senior of two employees applying for the position of assistant head cashier. The collective agreement clause at issue provided that when additional full-time employees were required, preference would be given to part-time employees based on seniority, skill and qualifications. The arbitration board concluded that the decision of management ought not to be interfered with as long as management acted honestly and reasonably.
[19] The Divisional Court set aside the arbitration board’s decision, finding at para. 19 that the board had “unduly restricted itself and has failed to determine the issue placed before it.” At para. 20, the Divisional Court expressed its concern that given the restriction the board had placed upon itself, “one cannot be certain that the board determined, as it must, whether the employer complied with the provisions of the collective agreement.” At paras. 23 and 24 the Court goes on to state that:
The board as a creature of the collective agreement must then see to it that the provisions of the collective agreement have been complied with; its role cannot be more or less than this. The honesty and lack of malafides in making the decision are factors to be taken into account. So, too, is the question of whether or not the employer has acted unreasonably. Indeed, in determining the “reasonableness” of the employer’s decision, the board may go a long way to determining the issue submitted to it. However, once the collective agreement makes provisions as to the method of selection of employees for promotions, then the board must see to it that those provisions have been complied with and in so doing, it cannot restrict itself to determining whether the employer acted honestly and reasonably. If the board is not to make such a decision, then the parties in the collective agreement should insure that the management’s right in this regard is unfettered.
As a result, I am of the opinion that the matter should be remitted to the board to determine whether or not the employer…complied with Article 9.04 of the collective agreement. The issue to be determined by the board will be one of comparing the respective skills and qualifications of Mrs. Dawson and Miss Holloway for the job in question, but without limiting itself to determining if the employer’s selection was honest and reasonable.
[20] According to the Union, to comply with Great A and P, the Arbitrator in this case had to perform his own exercise of comparing the skills and qualifications of the employees in question to determine whether the Employer was correct in its decisions concerning which employees to lay off. Without performing this exercise, the Arbitrator could not properly decide whether the provisions of the collective agreement regarding layoff had been properly complied with. In this case the Arbitrator only ensured that the Employer correctly applied the criteria set out in the collective agreement to its decision; after that he deferred to the Employer’s determinations on the grounds that they were reasonable.
[21] In Re Zellers Inc. and UFCW, Local 175 (Vendetti), 2004 CarswellOnt 10803 at page 23, Professor Brian Etherington (the arbitrator in that case) comments as follows with respect to Great A and P and how it has been interpreted in the arbitral jurisprudence since it was released:
Traditional arbitral reluctance to review management assessments of qualifications in posting grievances on any standard more exacting than reasonableness and good faith was brought into question by the Ontario Divisional Court ruling in Great A and P, supra, which suggested that they should apply the standard of correctness. However, on closer examination most arbitrators have held that Great A and P merely insisted on the requirement that arbitrators apply the standard of compliance with the collective agreement and continue to apply the standard of reasonableness to employer determinations of whether a candidate’s qualifications are demonstrably better or relatively equal.
[22] Professor Etherington’s assessment is confirmed by the following statement in Donald J. M. Brown & David M. Beatty, with the assistance of Christine E. Deacon, Canadian Labour Arbitration, (Toronto: Canada Law Book, 2017) at 6:3100: “Even among arbitrators who assert jurisdiction to review an employer’s decision as to the relative abilities of several employees on the merits, there remains a strong presumption of arbitral deference to the employer’s judgment.”
[23] In Communications, Energy and Paperworkers Union of Canada,Local 30 v. Irving Pulp & Paper, Ltd., 2013 SCC 34 (“Irving Pulp and Paper”), both the majority and minority refer to the role that arbitral consensus plays in the reasonableness analysis. As put by the majority at para. 6, “This body of arbitral jurisprudence is of course not binding on this Court, but is nevertheless a valuable benchmark against which to assess the arbitration’s board’s decision in this case.” According to the minority, at para. 78:
Respect for prior arbitral decisions is not simply a nicety to be observed when convenient. On the contrary, where arbitral consensus exists, it raises a presumption – for the parties, labour arbitrators and the courts – that subsequent arbitral decisions will follow those precedents. Consistent rules and regulations are fundamental to the rule of law.
[24] In this case the approach of the Arbitrator on the effect of Great A and P was consistent with arbitral consensus. It is also consistent with the statement by the Court of Appeal in Council of Printing Industries and Toronto Pressman and Assistants’ Union No. 10 et al, (1983), 42 O.R. (2d) 404 at p. 409, decided 7 years after Great A and P, that “Since almost the commencement of collective bargaining in this country, the promotion and lay-off decisions of employers have been subject to the standard of reasonableness even though collective agreements seldom contain explicit statements to this effect.”
[25] The Applicant also relies on a more recent decision from the Supreme Court of Canada, Association of Justice Counsel v. Canada (Attorney General), 2017 SCC 55, where the Supreme Court reviewed the decision of an arbitrator on a policy matter who found that as long as a management policy was “within the range of possible choices and has a supportable relationship to the business objectives, the arbitrator is not empowered to substitute his or her views for what management has in fact done.” (at para. 26). The Court overturned the arbitrator’s decision on the basis that it imported “the judicial review reasonableness inquiry into the labour arbitrator’s task of assessing the exercise of management rights. This conflates the distinct roles that arbitrators and reviewing courts play in the context of labour grievances.” (at para. 27) The Applicant submits that the Arbitrator in this case similarly conflated his role with that of a reviewing court on judicial review.
[26] The decision in Association of Justice Counsel has no application to the case at bar. Association of Justice Counsel concerned the imposition of a new management policy. In such a situation Irving Pulp and Paper has made it clear that the proper analytical framework for an arbitrator to apply is the balancing of interests approach, an approach that the arbitrator at issue in Association of Justice Counsel did not apply.
[27] The Union also referred us to the decision of the Alberta Court of Appeal in United Food and Commercial Workers Canada Union, Local 401 v. Sobey’s-Safeway Operations (Provincial), 2019 ABCA 175, where the Court confirmed that “the meaning of reasonableness within the arbitration context differs depending on the circumstances. This is in stark contrast to reasonableness as a standard of review in the judicial review context… As a result, to conflate these two contexts and to apply the reasonableness standard from one to the other is to make a fatal error.” (at para. 14). The Court then goes on to assess reasonableness and what it means in the arbitral context. In doing so it confirms, at para. 16, the significance of Association of Justice Counsel – that is, “the Supreme Court has confirmed that the assessment of whether the policy was a reasonable exercise of management rights does not involve deference to the employer.” This case just reinforces the fact that Association of Justice Counsel is a case that applies to policies, not to individual layoff decisions.
[28] The Union also submits that there is no reason in principle to distinguish the decisions at issue from the decisions in discharge cases. Like a discharge, the layoffs had devastating consequences for both Grievors.
[29] This submission ignores the fact that in the arbitral jurisprudence there is a different analytical framework for discharge cases, which involve determining whether there was just cause for dismissal. In those cases, the arbitrator must make their own factual findings about whether the grievor committed the misconduct alleged and then decide whether the misconduct was of a character that warranted punishment. (United Food and Commercial Workers at para. 15). This is not the framework that the arbitral jurisprudence states should be applied to layoff cases.
[30] For all of these reasons I find that the Arbitrator did not apply the wrong standard of review or fail to answer the question he was supposed to answer. His analysis of the issue before him was in accordance with accepted arbitral jurisprudence and reasonable.
The Applicant’s Other Submissions
[31] The Union made a variety of other submissions in its factum, which it decided not to pursue in oral argument, but did not abandon. Thus, I will deal briefly with those submissions.
[32] In its factum the Union argues that the Arbitrator “afforded undue, if not complete deference to the Employer’s decision to conduct a lay-off.” There is no merit to this submission. The Arbitrator did not give complete deference to the employer on the decision to lay off. Rather, he held that his evaluation in this regard should be focused on whether the layoff decision was made in good faith and was reasonably related to the economic and business interests of the Employer. There is no suggestion that this approach is not consistent with established arbitral authority. The Arbitrator’s decision on the question before him involved a review of the evidence and findings of fact on that evidence. There is no merit to any argument that these findings were unreasonable.
[33] As noted earlier in these reasons, the Union also attacked the Arbitrator’s decision on the basis that he applied the incorrect criteria by confusing “ability” with “qualifications”. According to the Union, the outcome of this confusion was that Employer’s decision undermined seniority. Again, there is no merit to this submission. The Arbitrator reviewed the evidence on this point and made a reasonable factual finding that no such confusion took place.
[34] Finally, the Union submitted that the Arbitrator’s delay in issuing his decision was far outside the 60-day time period set out in s. 48(8) of the Labour Relations Act. According to the Applicant, given this and given the lack of explanation for the delay, the decision should be set aside on the basis that the Arbitrator had lost jurisdiction.
[35] The Union could point to no authority where a decision of an arbitrator had been set aside on the basis of delay. In fact, the authorities suggest otherwise – particularly because to do so prejudices not just one side, but both (see Air-Care Limited v. USWA, 1973 31 (SCC), [1975] 1 SCR 2 and Dufferin-Peel Catholic District School Board v. O.E.C.T.A., 2008 CarswellOnt 86 (Div. Ct.). Further, s. 48(11) of the LRA provides a remedy in the event that an arbitrator does not render a decision within the time prescribed – an application to the Minister for a direction or order. The Union did not avail itself of this remedy. Finally, this is not a case where the Arbitrator’s delay in writing the decision undermined his ability to do so fairly and completely. His reasons were lengthy, detailed and cogent. In saying this I am by no means endorsing a practice of delaying the release of a decision in a labour relations matter. Such delay undermines one of the rationales for the enactment of a separate administrative scheme for such matters – speedy and effective decision making.
Conclusion
[36] For these reasons the application for judicial review is dismissed. As agreed by the parties, as the successful party the Employer is entitled to its costs, fixed in the amount of $5000.00, all inclusive.
Sachs J.
I agree _______________________________
D.L. Corbett J.
I agree _______________________________
Sutherland J.
Released: November 5, 2019
CITATION: IBEW Local 636 v. Orillia Power Generation Corp., 2019 ONSC 6442
DIVISIONAL COURT FILE NO.: 449/18
DATE: 2019/11/05
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Sachs, D.L. Corbett and Sutherland JJ.
BETWEEN:
International Brotherhood of Electrical Workers, Local 636
Applicant
– and –
Orillia Power Generation Corporation And George Monteith
Respondents
REASONS FOR DECISION
Sachs J.
Released: November 5, 2019